Honda VTR: Now in India

After months of speculation, Honda Motorcycle & Scooter India (HMSI) finally rolled out its first motorcycle last fortnight. The motorcycle, which was to be launched the day after BT went to press, is said to be based on the best-selling Honda VTR and will feature a 'mono' rear shock absorber instead of the standard 'dual' shock absorbers, thus earning the name ''Unicorn''. It is powered by an 18 horsepower, four-stroke, 150cc engine. While reliable information about its pricing was not available at press time, sources said that the motorcycle would undercut the segment leader, the Bajaj Pulsar, which has a showroom price of around Rs 55,000.

However, Bajaj Auto Vice President (Marketing), R.L. Ravichandran said that there would be no immediate price adjustments on the Pulsar. "This segment accounts for only 10-15 per cent of the overall motorcycle market of around 350,000 units a month. The Pulsar sells around 25,000 units a month and HMSI will initially only be producing 2,000-3,000 units a month." Ravichandran also said that consumers in this segment were not very price sensitive, and based their purchase decision on factors such as look and performance instead. "So, paying a few thousand more will hardly affect consumer decision," Ravichandran said. Just the same, Bajaj had better keep an eye on the Unicorn.

-Kushan Mitra

PART DEUX
Sequel Success Has Movie Studios Beaming

Bigger. And better. It's truly been a summer of spectacular sequels. Spider-Man 2, Kill Bill 2, Shrek 2, Anaconda 2...the list of spectacular sequels is lengthy. And they're raking in as much, if not more, than the originals. ''Excellent content and form have only made the embedded franchise stronger," says Uday Singh, CEO, Columbia Tristar, whose Spider-Man 2 surpassed the total collections of Spider-Man in just three weeks in India. Released in end-July, the second version of Sam Raimi's swinging marvel has already grossed Rs 30 crore at the box-office, compared with the Rs 27 crore Spider-Man brought in. Would that mean Part III is on its way?

-Abir Pal

HUH?
Time Warp

If Kolkatans didn't already hate Hitler, they got a new reason to do so on September 1, 2004. The city was awash in a sea of red that day as the ruling Left Front, with the active support of the state government, brought out a 1.1-lakh strong rally to profess, in the words of West Bengal Chief Minister Buddhadeb Bhattacharya, "solidarity with anti-imperialist people all over the world". But what about his government's decision to discourage rallies on weekdays and his personal "do-it-now" motto, which won plaudits from industry and people alike? "Blame it on Hitler," he said, "it was he who attacked Poland on this day." The comrades busy protesting this historical wrong, of course, didn't think it odd that the invasion actually happened 65 years ago.

-Arnab Mitra

INTERVIEW
"Foreign Takeover Of Banks Is Not An Issue''

Sixty-three-year-old Ishrat Husain, governor, State Bank of Pakistan (the country's Central Bank), and an old World Bank hand, has been at the helm of affairs for the last five years with great success. Credited with privatising the country's moribund banking system, he is also known to be close to President Pervez Musharraf. In Delhi on a holiday, he spent 45 minutes with BT's Ashish Gupta discussing banking in Pakistan. Excerpts:

In your last monetary policy (June) you had projected a GDP growth of 6.5 per cent and an inflation rate of 5 per cent. In the light of the sharp increase in oil and food prices, are you revising your growth estimates?

Not at this stage. But we are keenly watching global interest rates, the global price of food products and the oil situation and if we find that the balance of risks has moved towards higher inflationary expectations, then the Central Bank will revise the target. But we cannot have knee-jerk reactions because the recovery in Pakistan is recent.

How is the Central Bank tackling the issue of non-performing assets?

As we speak, 80 per cent of the banking assets are in private sector hands and four out of five public sector banks have been privatised. Hence, we have done away with political lending. Secondly, we have created an asset management company and some of the totally irrecoverable assets were bought by it and the underlying assets have been sold to third parties. So, the very fear that they will lose control of their assets has led to a lot of settlement of old loans. Thirdly, the banks have been allowed to write off their loans in a transparent manner over a period of time.

What is your approach to M&As?

We have no restrictions whatsoever on foreign ownership of nationalised banks. Since 1999, out of the five major commercial banks that are publicly owned, four have been privatised. We have sold out the first, second and fifth largest banks of the country to the private sector.

What kind of controls do you have over the banks?

We give what the public sector bank calls an indicative credit plan, which limits the loans that can be given out. We also give an indicative target for the private banks. The idea is to limit the borrowing of the government through the credit plan. We also set a reference benchmark rate called kibor (Karachi Inter-Bank Offer Rate), but the banks can charge any interest rate that they think fit. We don't interfere at all either in the interest rate side or in the deposit rate side. And incidentally, the interest rate has come down from 14 per cent in 1999 to 5 per cent today. Not a mean achievement.